A charity working abroad to heal horrific childbirth injuries in Ethiopia is being financially crippled after its hospital board warned partner organisations they had to be Christian to participate.

Australian gynaecologist Dr Catherine Hamlin - named a living national treasure for her pioneering medical work in Africa - has saved thousands of women from obstetric fistula.

The debilitating condition afflicts women after childbirth when torn body tissue becomes infected, leaving weeping wounds that shame the victim in the eyes of her community and can ultimately kill them.

Now, founder Dr Hamlin has found herself at the centre of a war with the Australian arm of her charity Hamlin Fistula, which she says is holding her ransom.

She says the problems began when she wrote about how she and her husband founded their hospital based on their Christian belief in helping others.

"It was only written to record how we started, and how we had continued with the work, and our work is to welcome anyone to the hospital," Dr Hamlin said.

This has broken my heart. I feel every time I see a woman [affected by obstetric fistula] 'how could they do this to me, how could they do this to this poor woman'.

Founder Catherine Hamlin

"[The charity] is nothing to do with our faith, it is to do with the love that we have for these patients."

But unknown to Dr Hamlin, senior management of her hospital took it upon themselves to write to one of their European trusts in the form of an ultimatum.

"Funds in other countries were told that if you don't live by this ethos, you can't be a partner, you can only be a donor," says art director Lucy Perry, who has worked for the Hamlins for the past seven years.

"Three or four of those [partner organisations] are run by a secular group of people, and some of them have been working with Catherine for decades.

"They were quite offended to be told they needed to be Christian to continue to be her partner."

Dr Hamlin confronted the Ethiopian board, and ultimately brought about the removal of the chairman. But the Australian office stood by the former Ethiopian board and its hardline approach.

The charity has received no money from its Australian trust in the last six or seven months.

"So the hardline position, the way that they have put that into action, is to cease fundraising," Ms Perry said.

"So since June last year, all fundraising activities for Ethiopia fistula in Australia have ceased."

Dr Hamlin's son Richard Hamlin, a trustee of Hamlin Fistula International, says an estimated $185,000 has been lost as a result.

In December last year, Richard Hamlin travelled to Australia to attend a meeting of the Australian board.

"I was told that basically I was considered not suitable for the Hamlin Fistula Ethiopia Board and unless I resigned there'll be a number of penalties applied to Hamlin and Fistula Ethiopia," he said.

It is really a betrayal of trust in me and in the work we are doing here. This has made me feel isolated from a lot of my friends in Australia and I feel upset I can't have any joy in my life.

Founder Catherine Hamlin

The ABC's 7.30 has obtained a document in which the Australian board calls on Richard Hamlin to resign, or toe the line. The document threatens the closing of the fund and the winding up of the company if he does not comply.

The Australian board currently controls $14 million in company assets.

Dr Hamlin says she has lost faith in three members of the Australian board, including the chairman.

"I want them to resign because they are not doing anything now to help us, and I feel it would be better for them to go," she said.

"This has broken my heart. I feel every time I see a woman [affected by obstetric fistula] 'how could they do this to me, how could they do this to this poor woman'."

The executive officer of Hamlin Fistula Australia, Doug Marr, was nominated to speak for the board although he has only been in the role for three weeks.

"There have been concerns about what Richard Hamlin has been doing in recent months," Mr Marr said.

"But our board as a whole and the company as a whole has never expressed a point of view.

"Richard Hamlin attended a meeting in December himself and things were said to him. But that's the extent of it."

Mr Marr says board members should not resign "because they think it's more important they provide stable source of income for the work being done in Ethiopia".

"The best way the Australian company can do that is if [the board members] stay as directors," he said.

Catherine Hamlin's work in Ethiopia continues to be funded by regular contributions from around the world, including the Australian Federal Government.

But the loss of the fundraising activities in Australia and the corporate standoff is taking its toll on her hospital, and on Dr Hamlin's own health.

"It is really a betrayal of trust in me and in the work we are doing here," she said.

"This has made me feel isolated from a lot of my friends in Australia and I feel upset I can't have any joy in my life."

Victoria's laws for disclosing political donations have long been criticised as among the weakest in the nation, but Premier Daniel Andrews says his proposed reforms will make the state's donations laws "the strictest donation laws in the country".